Dabur India share has delivered strong returns for investors during the last ten years. Dabur India share share price has zoomed from Rs 71.58 on October 1, 2009 to Rs 438.90 on the BSE. An investment of Rs 1 lakh in Dabur India share on October 1, 2009 would have grown to Rs 6.13 lakh on October 1 this year. However, of late, the performance of the consumer goods stock has not been impressive. It has gained 3.43% in the last one year and fallen 0.19% since the beginning of this year.
21 of 36 brokerages rate the stock "buy" or 'outperform', 11 "hold" and four "underperform", according to analysts' recommendations tracked by Reuters.
However, Dabur has been a stable performer when it comes to financials. Its strong earnings performance has helped the stock rise during the period. Dabur India logged Rs 1,445.29 crore net profit in last fiscal compared to net profit of Rs 502.43 crore for the fiscal ended March 2010. Total revenue rose to Rs 8,811.16 crore for fiscal ended March 2019 compared to Rs 3,428.76 crore for the fiscal ended March 2010.
Earnings per share rose to Rs 8 for fiscal ended March 2019 compared to Rs 6 for the fiscal ended March 2010. Debt to equity ratio has fallen to 0.03 for fiscal ended March 2019 compared to 0.18 for fiscal ended March 2010.
The firm's Q1 earnings in this fiscal did not meet street expectations due to rising costs. The firm reported a 10.24 per cent rise in consolidated net profit to Rs 363.81 crore for the first quarter ended June 2019, driven by growth in rural sales.
The FMCG firm posted a net profit of Rs 330 crore in the April-June period of the last fiscal. Dabur's revenue from operations in June quarter rose 9.25 per cent to Rs 2,273.29 crore, as against Rs 2,080.68 crore in the corresponding quarter of the previous fiscal.
For fiscal year 2018-19, Dabur's profit rose to Rs 1,446.25 crore compared to Rs 1,357.74 crore in the previous year. The firm's total income in the last fiscal stood at Rs 8,829.22 crore compared to Rs 8,053.52 crore in 2017-18.
Going forward, Dabur has maintained a very cautious stance due to near term macro-economic headwinds such as slowing down of month-on-month FMCG growth rate (13.2% in second quarter of 2019 to 3.7% in July 2019), increased unemployment, liquidity concerns with the dealers and floods in many states and curfew in J&K.
According to a report by Prabhudas Lilladher, Dabur has pinned its hopes on the early festival season, monsoons and the likely impact of government boost for rural India. Distribution expansion is pushing rural sales for Dabur, which is growing ahead of urban demand by 600bps (rural sales up from 44% to the 48%).
Dabur will focus on only eight power brands with innovations in existing brands with no new segment addition. Dabur has maintained its guidance of mid-single digit volume growth in FY'20 led by scaling up of eight power brands, increasing the direct reach in rural as well as urban India and revamping the supply chain infrastructure, the report said.
Edited by Aseem Thapliyal